Munksjoe-Ahlstrom Deal Faces In-Depth Probe From EU Regulator

Dec. 7 (Bloomberg) -- Ahlstrom Oyj faces an in-depth
European Union probe into plans to merge one of its units into
Munksjoe AB, regulators said today.

The European Commission set an April 29, 2013 deadline to
rule on the deal, saying it was concerned over the combined
firm’s high market share for so-called pre-impregnated paper
used to apply a decorative veneer to furniture and abrasive
paper backings, such as sandpaper, according to an e-mailed
statement.

“This proposed merger in the paper industry would remove a
competitor from some markets which are already highly
concentrated,” EU Competition Commissioner Joaquin Almunia said
in the statement.

Ahlstrom will hold a 15 percent-stake in the new company,
to be called Munksjoe Oyj, the companies said in August. They
anticipated annual synergies of as much as 30 million euros ($39
million.) While EU regulators have the power to block deals,
they can approve transactions after companies allay antitrust
concerns by agreeing to sell off assets or changing the way they
do business.

Ahlstrom and Munksjoe said the EU investigation may delay
completion of the first phase of the planned transaction until
the second quarter of 2012.

The companies “continue to work closely with the
commission, aiming at a completion of the demerger of Ahlstrom’s
label and processing business in Europe and other related
measures forming the first phase of the planned transaction
during the first quarter of 2013,” they said in an e-mailed
statement.